BRASILIA, May 16 (Reuters) - Economists at Bank of America Merrill Lynch on Thursday slashed their Brazilian economic growth forecasts and changed their interest rate and exchange rate calls, now predicting the central bank will ease policy by 100 basis points this year.

They now expect the economy to expand by 1.2% this year compared with their previous forecast of 2.4%, and cut their outlook for next year to 2.2% growth from 3.0%.

They now expect the central bank will cut its key Selic policy rate to 5.50% from its current 6.50%, and expect it to stay there throughout 2020. Preciously, they had penciled in 75 basis points of rate hikes to 7.25%. (Reporting by Jamie McGeever; editing by Jonathan Oatis)